As large information systems vendors consolidate and increase their data-collecting capacity, a parallel consolidation is going on among a group of vendors trying to earn their keep by putting the data to good use.
Hospitals and healthcare systems still are busy building the computer systems that can capture and merge data from all sites and departments and make the data universally accessible.
But once they do, "it's not enough to simply produce data-you have to cut it many different ways," said Sandra Smith, a Walnut Creek, Calif.-based consultant with Superior Consultant Co.
The imminent acquisition of Dilts Kappeler Durham & Co. by The Medstat Group is an example of how vendors of decisionmaking aids are taking tools built for healthcare purchasers and managed-care organizations and adapting them for integrated delivery systems.
Among other moves, Medstat plans to incorporate its Disease Staging IV system into DKD's Ascent Managed Care Information System. The Medstat product measures the severity and adjusts for the clinical risk of patient illnesses, which allows payers and providers to compare the outcomes of care among physicians or among institutions, said Vi Shaffer, vice president of marketing.
Medstat, a publicly traded company based in Ann Arbor, Mich., produces utilization and other types of data that big employers and managed-care companies need to know about healthcare providers to make purchasing or affiliation decisions, Ms. Shaffer said.
With the addition of privately held DKD, Medstat gains a contract management system to help providers "understand financially what they're committed to" in managed-care agreements, she said.
The decision-support tools are worked into an integrated network's main healthcare information system with an eye toward keeping track of intricate and ever-changing contract terms, which have a big effect on care decisions at many possible points of service, Ms. Smith said.
For example, admissions employees need to know what hospitalization restrictions or pre-authorizations are needed for a given person when the physician calls to admit the patient. Other terms may determine whether care will be authorized and paid for throughout the stay. A hospital can have 600 to 700 separate contracts, each with its own terms, complexities of payment and overlaps with other contracts, Ms. Smith said.
Those are big changes from several years ago, when payment was based on fees for services, discounts from those fees or federal reimbursements from Medicare or Medicaid. Information systems had limited payment arrangements to deal with, and changes typically needed to be implemented only once a year, she said.
The collective computerization of Medstat and DKD will not only manage the contract nightmare but also allow providers to audit the performance of contracts, do repricing to meet contract terms and develop pricing scenarios for upcoming negotiations, Ms. Smith said.
In fiscal 1993, Medstat took in $50 million in revenues, a 25% increase over the previous year, and earned $10.5 million, a 50% increase.